These are the most overpriced housing markets in the US in 2023
The last two decades have seen the average price of a house in the US more than double leaving many concerned when the bubble will burst.
Interest rates have been cranked up to levels not seen since the 2008 financial crisis. This has put huge pressure on Americans with mortgages, 42% of people and over 51 million households. With many homes bought during the covid-19 pandemic, there is a real worry about mortgage debt that could be the next threat to the US economy.
This spending spree is reflected in the average price of US homes. In the 20 years between January 2000 and January 2020 house prices went from an average of $202,000 to $383,000, nearly a 90% increase. However, in the three years since then prices jumped another 44% to $552,600. This is also reflected in average house price data which is slightly lower but also shows a sudden rise in 2020.
Despite these soaring prices, homeownership has been growing in the last seven years. This measure is still far from a peak in 2004 of 69.2%, a four-percentage point increase on 2022. This is inflated by the vast majority of white Americans owning a house (72.7%) compared to black Americans (44%) and Asian Americans (62.8%).
However, that median price also shows a steep drop-off at the turn of 2023. As the interest rates have risen, the fall in house sales is lowering the price. Surveys conducted have shown that 64% of Americans are waiting for mortgage rates to drop before buying a house.
While house prices have been on the way down, but that doesn’t mean every market has been following the trend of data.
The five most overpriced housing markets this year
Insider Monkey has compiled data from the Florida Atlantic University’s College of Business. Their dataset purports to calculate a fair value of a home, which is then compared with the Zillow Home Value Index.
5. North Port, Florida
Home Overprice Percentage: 44.63%
4. Tampa, Florida
Home Overprice Percentage: 45.18%
3. Cape Coral, Florida
Home Overprice Percentage: 45.34%
2. Detroit, Michigan
Home Overprice Percentage: 45.91%
1. Atlanta, Georgia
Home Overprice Percentage: 49.71%